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I don't like their assumption of 50% profit margin (including nothing but hardware). They have the manufacturing cost and the retail cost, why not use the ameri

I don't like their assumption of 50% profit margin (including nothing but hardware). They have the manufacturing cost and the retail cost, why not use the american manufacturing cost to think up a real retail price?

molmalo 15y ago
Why ? Because, as the article states: Companies have closed major facilities in the United States to reopen in China. By way of explanation, executives say they are competing with Apple for shareholders. If they cannot rival Apple’s growth and profit margins, they won’t survive. They don't care about workers, they care about shareholders. If Apple says to its shareholder "We'll earn 30% less next quarter, but we'll create 30000 new jobs in the US!" how do you think the market would react ? They'd sell like crazy! The share price would plummet. No one wants to loose money.
uncoder0 15y ago
I agree, they should have used a total price of $875. (34% Increase) $240/$178 * $649 $649 = iPhone 4S 16GB Unlocked | $178 = CoM in China | $240 = Aproximate CoM in USA
JumpCrisscross 15y ago
What's the moral advantage of using American over Chinese workers? By a similar token, why not just raise the wages of those Chinese workers by 100%. They'd be madly richer, very happy, and still far cheaper than American workers. Then again, the existing wage level is such that it commands some 8 000 applications a month (at Foxconn). Part of the gist of the article was that US regulations make building out flexible manufacturing capacity rapidly incredibly difficult. Quicker to do it in China. Ironic considered the PRC's legendary red tape (no pun).
- enjo 15y ago
  Apple owes its existence to American education, infrastructure, and a host of other services provided by American taxpayers. Why shouldn't they support the same families that supported them all these years?
  - tsotha 15y ago
    >Apple owes its existence to American education, infrastructure, and a host of other services provided by American taxpayers. Why shouldn't they support the same families that supported them all these years? You mean, why shouldn't Apple pay even more to support families it's already been supporting all these years? Do you honestly think Apple, as a corporation, has been a net-negative to the taxman?
  - yummyfajitas 15y ago
    Apple is no longer utilizing those services. It is instead using Chinese education and infrastructure. Why should Apple continue paying for services it no longer needs?
    - easp 15y ago
      Absolute and total nonsense. Do you really think Apple and other multinationals could operate as profitably, or at all, without many of "those services." Enforcement of Apple's intellectual property? Protection of their brand and trademarks? The contracts they rely on? The banks they rely on? Safe passage of ships and aircraft carrying raw materials and finished goods? The security and safety of their executives and engineers?
      - yummyfajitas 15y ago
        Enforcement of Apple's intellectual property? Protection of their brand and trademarks?... These are all benefits received by Apple USA, which pays income taxes to the US. Apple's Chinese subsidiaries (which is what we were discussing) do not receive those benefits from the US government, and hence do not pay for them.
        easp 15y ago
        No. We are talking about Apple. You may be talking only about Apple's Chineese subsidiaries. Even so, they do not exist in a vacuum, and it is foolish to think that Apple's IP, brand and trademarks would be as secure in China without the global system of IP protection that the US government has been instrumental in building.
- deleted 15y ago
  [deleted]

molmalo 15y ago

Why ? Because, as the article states: Companies have closed major facilities in the United States to reopen in China. By way of explanation, executives say they are competing with Apple for shareholders. If they cannot rival Apple’s growth and profit margins, they won’t survive. They don't care about workers, they care about shareholders. If Apple says to its shareholder "We'll earn 30% less next quarter, but we'll create 30000 new jobs in the US!" how do you think the market would react ? They'd sell like crazy! The share price would plummet. No one wants to loose money.

uncoder0 15y ago

I agree, they should have used a total price of $875. (34% Increase) $240/$178 * $649 $649 = iPhone 4S 16GB Unlocked | $178 = CoM in China | $240 = Aproximate CoM in USA

JumpCrisscross 15y ago

What's the moral advantage of using American over Chinese workers? By a similar token, why not just raise the wages of those Chinese workers by 100%. They'd be madly richer, very happy, and still far cheaper than American workers. Then again, the existing wage level is such that it commands some 8 000 applications a month (at Foxconn). Part of the gist of the article was that US regulations make building out flexible manufacturing capacity rapidly incredibly difficult. Quicker to do it in China. Ironic considered the PRC's legendary red tape (no pun).

enjo 15y ago
Apple owes its existence to American education, infrastructure, and a host of other services provided by American taxpayers. Why shouldn't they support the same families that supported them all these years?
- tsotha 15y ago
  >Apple owes its existence to American education, infrastructure, and a host of other services provided by American taxpayers. Why shouldn't they support the same families that supported them all these years? You mean, why shouldn't Apple pay even more to support families it's already been supporting all these years? Do you honestly think Apple, as a corporation, has been a net-negative to the taxman?
- yummyfajitas 15y ago
  Apple is no longer utilizing those services. It is instead using Chinese education and infrastructure. Why should Apple continue paying for services it no longer needs?
  - easp 15y ago
    Absolute and total nonsense. Do you really think Apple and other multinationals could operate as profitably, or at all, without many of "those services." Enforcement of Apple's intellectual property? Protection of their brand and trademarks? The contracts they rely on? The banks they rely on? Safe passage of ships and aircraft carrying raw materials and finished goods? The security and safety of their executives and engineers?
    - yummyfajitas 15y ago
      Enforcement of Apple's intellectual property? Protection of their brand and trademarks?... These are all benefits received by Apple USA, which pays income taxes to the US. Apple's Chinese subsidiaries (which is what we were discussing) do not receive those benefits from the US government, and hence do not pay for them.
      - easp 15y ago
        No. We are talking about Apple. You may be talking only about Apple's Chineese subsidiaries. Even so, they do not exist in a vacuum, and it is foolish to think that Apple's IP, brand and trademarks would be as secure in China without the global system of IP protection that the US government has been instrumental in building.
deleted 15y ago
[deleted]